Free Trial

Post-PPI USD Strength Reverses Into Close With Eyes On Upcoming Event Risk

FOREX
  • US PPI data surprised to the upside on Friday, prompting a quick spike in the greenback amid pressure on equity indices. The move was most notable in USDJPY which rallied over 100 pips to fresh intra-day highs of 1.3690.
  • Despite the initial USD surge, momentum faded thereafter, and the greenback slowly reversed lower throughout the course of the afternoon, aided by a softer inflation component within the UMich survey and as markets turn their focus to next week’s CPI and major central bank decisions.
  • With equities trading back into positive territory, the likes of GBP, AUD and NZD erased the entirety of the post-data weakness and all look set to post gains of above 0.5% on Friday.
  • GBPUSD’s trend condition remains bullish. Price has traded through the 200-dma and maintains a bullish sequence of higher highs and higher lows. Note that moving averages studies remain in a bull-mode position. A resumption of gains places the focus on 1.2406, the Jun 16 high.
  • EURGBP edged toward the bottom-end of the week's range into the Friday close - with support layered between 0.8556-62 but seen stronger into the 200-dma/Dec 1 low, both of which cross at 0.8547. Weakness through here would be the cross at the lowest levels since late August.
  • Attention turns to Tuesday’s US CPI report followed by a host of major central bank decisions next week including the Fed and the ECB.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.